Mr GAVAN O’CONNOR (7:10 PM)
—I have heard it all. When the honourable member for Cook comes in here talking about this Tory government having compassion then it is time we all packed our bags and went home. I have great pleasure in speaking on the government’s Appropriation Bill (No. 1) 2004-2005 and related bills today as this is one of the most unfair budgets that I have seen delivered in this parliament. Just when I thought this arrogant Prime Minister and his smirking Treasurer could not possibly plumb any lower depths of cynicism and bald hypocrisy they have proved me wrong again. The budget brought down by the Treasurer is about as cynical an exercise as you could ever witness and one that only a deceptive and manipulative Tory could construct. Its centrepiece is tax cuts that the government is attempting to masquerade as tax reform.

The unprecedented budget surplus generated by strong growth in the world economy and a literal boom in key commodity prices for this country presented the Howard government with a golden opportunity to nation build and invest in things that would underpin the future prosperity of my electorate and indeed Australian overall. What the Howard government delivered was a missed opportunity to address some very important shortcomings in the economy that, according to economic experts and key economic reports delivered by the OECD and others, threaten Australia’s competitive position over the long term.

There was very little in this budget to address with any sense of urgency the infrastructure bottlenecks that have developed in our economy over the past 10 years. There was very little in this budget to address in any coordinated way the skills shortages that have developed under the policies of the Howard government and which threaten our productivity over the longer term. Indeed, the government’s response to the latter is to use the immigration program to address a problem of its own creation rather than recruit and train Australians to acquire the necessary skills that this economy needs.

What we did get, however, was a massive tax cut heavily skewed to high-income earners, with ordinary families on low and middle incomes receiving a tax cut that would hardly buy them a pie or a can of lemonade at the MCG on any given Saturday. That is the crux of the tax cuts that the government delivered. On any given Saturday in Melbourne the tax cuts delivered by John Howard and Peter Costello would not buy you a pie and a can of lemonade. When the honourable member for Lingiari goes to the footy he likes a little bit more than a pie and sauce. I am sorry, member for Lingiari, you miss out—oh, no, you do not miss out; you get a tax cut of over $4,000.

Mr GAVAN O’CONNOR
—Caviar and champagne. You will be up in the corporate box—no, you will not be up in the corporate box; you are always on the outer with us members. But I know where the honourable member for Cook will be. He will be up in the corporate box with his $4,000 tax cut that he got from the Prime Minister, swilling on caviar and champagne, pretending to watch the match as they talk over how they are next going to drive the boot into pensioners and working people. We know where you come from in all of this, so do not get up here and talk about compassion for working people. Do not get up here in this House and pretend that you are the ones that represent the real interests of working people because day after day in this House the Prime Minister gets up and misrepresents the statistics on the issue of real wages for working Australians.

In his budget reply speech, the Leader of the Opposition outlined an alternative tax plan that would have instituted some genuine reforms of the taxation system and would have given some meaningful relief for hard-pressed low- and middle-income families throughout the nation and in the Corio electorate. The Leader of the Opposition also outlined infrastructure proposals and initiatives in the skills formation area that would have gone some way to addressing the chronic problems that we now face in the Australian economy.

I am wondering why the government, when presented with an enormous opportunity generated by the surplus on the budget, did not address the problems that it has created for the Australian economy in the infrastructure and skills areas. It did not do so for a very important reason: the Treasurer wanted to play politics with the surplus to bolster the numbers on the Liberal backbench for the challenge that may or may not come to John Howard for the Liberal leadership.

We on this side of the House know that cynical political exercise that we saw in the budget. We have seen it before. The government, at the front end of the political cycle, pays off the top end of town constituency with significant tax cuts. Then, of course, it hoards the surplus and before an election releases the goodies to buy some votes at the next election. It has done it time after time. Meanwhile, families in the electorate of Corio—struggling families on low and middle incomes—have had to put up with mortgage increases after interest rate rises and with an increase in private health insurance premiums courtesy of this Treasurer—and in the electorate of Corio over 50 per cent of electors have some form of private health insurance. They had to put up with no tax cut in the previous budget and here in this budget we have the Treasurer insulting them with a minimal tax cut that he portrays as being something of substance. We know where the government is in the political cycle. We know that it is delivering to its supporters at the top end of town early in the cycle so that later it can attempt to buy votes again with the budget surplus. Meanwhile, struggling families in the electorate of Corio suffer. They suffer because of what the Treasurer has failed to do in this budget—that is, to deliver some meaningful reform and some meaningful tax cuts to them.

The government has squandered a golden opportunity to secure our future. As I have said, this is a budget that is basically framed to bolster the political fortunes of the Treasurer with the backbench. This budget fails to put downward pressure on interest rates and inflation. It is a consumption based budget rather than one that invests in our future. It is a very, very risky budget. Australia should be experiencing the full benefits of a growth global economy and the best terms of trade we have had in 30 years. We have experienced an extraordinary set of economic circumstances that has nothing to do with this government’s economic performance, and I will mention them. We have seen the benefits of a growth oriented global economy that has delivered high growth rates in key economies that consume the outputs of the Australian economy and we have seen the best terms of trade that we have had in some 30 years, which had nothing much to do with the policies of the government.

Despite these economic parameters shining on Australia at this time, last year we managed to engineer an economic growth rate of only two per cent, and the predictions this year are between two and three per cent. Despite those favourable external economic circumstances, we have seen a continuance of the poor export performance of the Australian economy and a spiralling of our external debt. So point No. 1 in this debate should be that the Howard government, despite the external economic parameters working to Australia’s benefit, has squandered the economic legacy left to it by Labor. You have squandered it. We left you with four years of four per cent growth.

Mr Pyne interjecting—

Mr GAVAN O’CONNOR
—Even the Parliamentary Secretary to the Minister for Health and Ageing, who has I would imagine been termed an economic imbecile in these debates in the past—I would not dare use those words again, Mr Deputy Speaker—with his limited understanding of economics, ought to be able to comprehend that when Labor leaves you four years of four per cent growth you should be able to maintain it, especially when the economic parameters are flowing Australia’s way. And you have not been able to do that. Of course, we have seen a spiralling of Liberal debt.

Mr Pyne interjecting—

Mr GAVAN O’CONNOR
—I will never take anything that the honourable parliamentary secretary says in an economic sense as being accurate at all, but I do listen to the Treasurer—the Prince Charles of Australian politics. I do listen to his economic analysis from time to time. I can recall when the Treasurer was in opposition that he took the level of household debt and the level of external debt, wrapped them together, divided them by the Australian population and came up with a figure that said that for every man, woman and child in this country there was around $10,000 worth of Labor debt.

Let me apply the same analysis that the Treasurer used. When we lump the level of household debt with the level of external debt, we find that debt levels under the Liberal Party have doubled according to the Treasurer’s criteria.

Mr GAVAN O’CONNOR
—You would not want to borrow to buy the meat pie and the can of lemonade at the footy. You cannot get it with your six bucks and you would not want to put it on the credit card. According to the Treasurer’s own analysis, Liberal debt in this country has doubled. Not only are you the highest taxing government in Australia’s history, you are the one that is recorded—according to Treasurer Costello’s analysis—as having the highest level of debt per person that this country has ever seen. What an extraordinary achievement for a government that was left an economic legacy that any government would be proud to leave. We broke the back of Liberal inflation, bringing it down from around 11 per cent to two per cent. That underpinned the low interest rates that you claim credit for. The foundation for that was laid when we broke the back of Liberal inflation. Of course, when we look at the current export performance of this country we see you are in the ‘hopeless’ category.

I am giving you an economic analysis here—a backdrop to the budget that was just brought down. I make the point that you are the highest taxing government that Australia has ever seen—a Liberal government. You have the highest level of Liberal debt we have seen in this country and you have squandered the growth legacy that Labor left you. I do not want to labour that particular point but I think it is worth stating in this debate because—despite extraordinary growth rates, despite global growth rates, despite the commodities boom and despite the best terms of trade we have had in many years—you have failed to deliver on the growth front.

I want to make some comments about the budget as it relates to my constituency and the rural sector. Most of my constituents would be categorised as low- and middle-income earners—and they did not fare well at all in this budget, compared to the high-income earners in this place. We ought to put on the public record the fact that when the Treasurer announced his massive tax breaks for high-income earners, the Liberal and National party members cheered—and why wouldn’t they cheer, because their pockets were being lined at the expense of my constituents.

I note that in the 2001 document produced by the Parliamentary Library of electoral divisions ranked by poverty rates, Corio ranks in about the middle with a poverty rank of 9.5 per cent. That shows that there is quite a significant degree of poverty in my electorate. How was poverty in my electorate addressed in this budget? Most of my constituents did not even rate much at all in the tax cut stakes, according to the Treasurer. In this table the top 20 electorates in Australia have poverty levels ranging from 12.5 to 15.1 per cent. Ten of those 20 are National Party seats. Why did the National Party come in here, support the budget measures and turn their backs on their constituencies and high levels of poverty in their electorates? Going to the farming sector, we hear much in this place about the Prime Minister’s great love of the land. We know he pulls the Akubra on every now and then and goes for a walk in the outback. He kicks the dust around, talks about the drought and then fails to deliver on time to farmers. But then he delivers a budget with tax cuts that really do not assist hard-pressed farmers at all, because most farmers in Australia do not earn incomes that qualify for the large tax cuts delivered in this budget.

Labor put a series of proposals to this House in the budget in reply. I would like to reiterate some of those proposals in this debate. We put a plan to this House and to the Australian people that would deliver an extra $12 a week to everyone earning between $25,000 and $75,000. That is double what the government is offering, and that proposal would cost about the same as the $24 billion that the government has put on the table. The simple reality is that the tax cuts offered by the government give people earning over $125,000 a year 10 times the tax cuts of somebody earning less than $50,000. How can that be fair? The Australian people are asking: how can it be fair that a government delivers tax cuts to people earning over $125,000 a year that are 10 times the tax cuts that it delivers to people earning less than $50,000? Hardworking Australian families will get a measly tax cut of only $6 a week—not even a pie and a can of lemonade at the MCG on any given Saturday. However, Prime Minister John Howard, his backbenchers and high-income earners throughout Australia get a tax cut of $65.

Australians now are paying more for their health care. People in Geelong are paying more for their education. People in my electorate of Corio are paying more for their petrol. They are now paying more for their mortgages—all with a budget surplus and the Treasurer with his hands in their pockets. The biggest taxing Liberal Treasurer in Australia’s history can only deliver low- and medium-income earners a measly $6 a week. It tells you what this government is all about: it is a government for the big end of town; it is not a government for ordinary working Australians. Do not insult ordinary Australians by claiming that you defend battling families. (Time expired)